Trading options seems dangerous. There’s more leverage and potential risk.
However, David Jaffee with BestStockStrategy.com has devised a trading strategy that enables his students to reduce risk while also winning virtually every trade.
BestStockStrategy.com’s Option Trading Strategy
David Jaffee encourages his students to be patient and disciplined.
Those people who claim to earn 350% a year by day trading? Mr. Jaffee believes that they are fake gurus.
In his opinion, the best way to be a consistently profitable trader is to sell options on the largest companies in the world.
During a bull market, he instructs his students to sell put options.
During a bear market, he instructs his students to sell call options.
David Jaffee has a watch list of 15–20 stocks and gets comfortable with each stocks’ recent trading range.
If a stock trades outside its recent trading range, then BestStockStrategy will sell a put (or a call) and choose a strike price around 10% below (or above) the market price.
In 2019, BestStockStrategy was able to realize 115% returns with 0 losing trades all year: 2019 Performance Video (No Losing Trades)
When asked how he’s able to realize such a high win rate, David Jaffee said, “Traders underestimate the negative impact of stress. I allocate capital to only the best trading opportunities. By doing this, it’s extremely rare for my positions to get challenged. By taking only the best trades, I’m able to generate stable returns with lower portfolio volatility.”
Why Investors Fail When Trading Options
While having a 100% win rate seems incredible, David Jaffee warns that many options traders will lose money if they are not patient and disciplined.
Jaffee says, “When formulating an options trading strategy, many traders become overconfident and if they win most of their trades, they begin trading too often and entering trades that they shouldn’t. During periods of low volatility, or when the market is trading at all-time highs, it’s extremely important to be patient. However, many traders are uncomfortable trading small during these time periods and instead they’ll trade 80%+ of their available buying power, only to then suffer massive losses when volatility expands or the market experiences a correction.”
I noticed that BestStockStrategy.com has started to trade vertical credit spreads, instead of naked options.
When asked about this, David Jaffee indicated that he prefers defined risk trades during times when the market is trading close to all-time highs because there tends to be violent corrections and volatility expansions at the end of bull markets.
BestStockStrategy.com also believes that investors should not diversify their portfolio to a point where they allocate capital to inferior positions.
If there’s an incredible investment opportunity that will yield strong returns, then David Jaffee encourages his students to allocate up to 20% of their trading account in that position.
How to Get Started by Trading Options
David Jaffee believes that students can learn to trade options within 1–2 months.
They can use options trading to maximize their trading gains, improve their performance while reducing overall risk.
BestStockStrategy.com has taught over 1,000 students.
If you’re interested in learning more, then you can visit BestStockStrategy.com/memberships